2008 (7) TMI 680 - AT - Central Excise

Summary

Issues:
1. Requantification of duty under SSI benefit
2. Imposition of penalty
3. Enforcement of bank guarantee beyond scope

Analysis:

Issue 1: Requantification of duty under SSI benefit
The case involved a remand by the Bench for the requantification of duty after considering the appellant's plea for the grant of Small Scale Industry (SSI) benefit under Notification No. 1/93-C.E. The original authority confirmed a duty demand of Rs. 2,29,930/- against the appellant and imposed a penalty of Rs. 50,000. The first appellate authority reduced the penalty to Rs. 40,000 but upheld the rest of the decision. In the present appeal, the appellant raised grievances regarding the non-granting of Section 4(4)(d)(ii) benefit, the penalty imposition, and the enforcement of the bank guarantee beyond the show-cause notice scope. The Tribunal found valid reasons to remand the case to the original authority for granting the benefit of Section 4(4)(d)(ii) while quantifying the duty demand. It was emphasized that if there was no proposal for confiscation in the show-cause notice, there should be no redemption fine or appropriation from the bank guarantee amount.

Issue 2: Imposition of penalty
The appellant contested the penalty imposition, claiming a bona fide belief regarding the clearance of waste and scrap under Rule 57F(2) without duty payment for regranulation. The Tribunal decided to set aside the lower authorities' orders and remand the case for the adjudicating authority to reconsider the penalty issue afresh. The Tribunal directed a fresh consideration of whether redemption fine should be imposed and to what extent, depending on the confiscation proposal in the show-cause notice.

Issue 3: Enforcement of bank guarantee beyond scope
The appellant argued that the enforcement of the bank guarantee went beyond the show-cause notice's scope as there was no proposal for confiscation of the seized goods. The Tribunal agreed and held that if there was no confiscation proposal, there should be no redemption fine or appropriation from the bank guarantee amount. The case was sent back to the adjudicating authority to address this issue and grant the appellant the benefit of Section 4(4)(d)(ii) while determining the duty demand.

In conclusion, the Tribunal set aside the lower authorities' orders, remanded the case for a fresh consideration of duty quantification, penalty imposition, and bank guarantee enforcement, emphasizing the importance of adherence to the show-cause notice proposals and legal provisions.